SCRAP the TELLY TAX? Ancient BBC Time Lords mull Beeb's future

Should Auntie lose weight and compete for your dosh?

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It was as good as anything on the telly. Four past BBC chiefs were giving MPs their opinions at Westminster.

The Commons media select committee is running an enquiry into the future of the BBC, looking at how it should be governed, and as technology and habits change, whether should there even be a per-household fee levied on TVs.

Lord John Birt (DG in the 1990s) and Lord Michael Grade (TV controller in the 1980s and chairman 2004-2006) were joined by the chairman and DG who were forced out by the Labour government 10 years ago: Gavyn Davies and Greg Dyke.

Two of the four - Grade, and more surprisingly, Davies - thought change would and should come, with Davies (a lifelong Labour supporter), reluctantly backing subscriptions as an alternative. But he wasn’t in a hurry to do so, and it was evident he didn’t really want to happen.

“There’s no doubt the licence fee is a bad tax if you were designing a tax. It’s very unfair and has these consequences [mass non-payment]. But it has benefits for the public service broadcasting infrastructure - that’s an ecology we should bear in mind,” Davies told MPs.

“It is regressive,” Dyke agreed. “If it was funded through income tax then at least the tax is being collected on a fairer basis.”

The most significant technological change since Davies had left, he pointed out, was that it was now possible to exclude viewers who didn’t pay. But doing so lost an element of the BBC’s "universal service".

MPs pointed out that the Beeb could be obliged to carry out any public service obligation Parliament wished. Davies countered with the observation that regulation worked better to stop bad things happening than in encouraging good things to happen.

Habits are changing and within 10 years, with people viewing a vast range of output on all kinds of devices, subscription offering may be the best way to safeguard BBC.

As former Beeb chairman Davies pointed out, it had been found that 70 per cent of people would pay a subscription, and only 30 per cent would refuse. In the previous hearing MPs heard how many people would pay more than the current £145.50 per year (as they often insist they would today) giving the BBC a larger income. It then became clear that it was Davies who was objecting to the change. He feared that the BBC go downmarket and start chasing audiences.

“If you say to the BBC ‘compete for subscriptions’, then they’ll want to do that," said Davies. "That’s not what they should do.”

A terrible vision of some distant future in which the BBC filled its schedules with cheap cooking shows and talent contests filled the room.

“So you’ve never chased audience ratings?” asked MP Angie Bray.

Davies said the BBC pays too much attention to ratings already, partly because it’s easier to measure ratings. Bray said polling showed the public very evenly split on the licence fee – with half backing it, and half backing either ads or subscriptions.

The most radical proposals came from Grade, who said the BBC should be cut back to a news operation and leave the cooking shows and talent shows to the private sector.

Auntie needs to lose some weight

“The BBC fails in its management and it has become virtually unmanageable… in the early days it had to design and build its own cameras,” he said. (In fact it was doing so until John Birt closed down the BBC’s camera factory in Ealing in the early 1990s). He added: “It’s far too big in areas it doesn’t need to be in, and hasn’t kept pace with private service industries”.

You could say Grade has skin in the game, as he’s chairman of Shepperton and Pinewood Studios. If the BBC flogged off its studios, it’s likely that its television programmes would be made using Grade’s private services.

Grade added: "We ask the director general to be a master of the digital universe, a master of property, of international exploitation and distribution, of studio management, production, creativity. I don't know any business that is as diversified as the BBC." His point was that before waffling on about models of governance, we should decide what the BBC should actually do.

Slimming down and outsourcing would be “the only way they’ll keep the licence fee to within a quantum, a number, that is defensible. A big piece of work needs to be done to find a model for the BBC that doesn’t in any way interfere with its remit, but that follows the much more efficient private sector model.”

Lord Birt has steadfastly refused invitations to comment on the BBC since he left in 2000, so this was a rare outing. He said the BBC was “unsurpassed as a creative institution, a cornerstone of British cultural policy, an amazing technology innovator and one of most effective new media organisations in the world. Along the way there have been some pratfalls – raising questions not about value, but about how the BBC is organised and run”.

That was the other topic that greatly interested the Select Committee.

We can't go on like this

If there was anything approaching a consensus amongst the four grandes fromages yesterday, it was that the governance structure introduced post-decapitation in 2004 wasn’t working. The old Board of Governors had been abolished after the decapitations, and a Trust put in place instead. But this had to act both as cheerleader and defender of the BBC – against attacks from the Daily Mail – and yet also represent the taxpayers who fund it.

The Charter document which created the Trust also cunningly forbade it from doing anything about executive fatcat pay. It could complain, but not do much else. So a shift back to something similar to the older oversight structure was needed, said Davies.

“The chairman should move from the Trust back to the executive job. Non-execs should be on that board too. The Trust should simply represent the licence payer. That would work,” he said.

The BBC saves its most dogged fights not for ITV or the Conservatives, but for the National Audit Office. The recent NAO report into the DMI fiasco showed vital documents were still being withheld from public scrutiny. Davies said that as chairman, he’d found the BBC had less to fear from NAO than he’d thought.

“I don't like monopolies and we are facing a situation where the BBC has an increasing monopoly on creative matters,” said Birt.

In 2010 the Digital Britain report backed a fund for all public service broadcasters – so a tax would still be levied on TVs, but it wouldn’t be a monopoly tax going to one broadcaster. That would be better than leaving it all to the market, said Grade.

Channel 4 should be funded entirely from some kind of tax or levy, giving the BBC some competition. The nation needs more spectrum, said Grade, so some things have to go. BBC2 and BBC4 “spread too little money over too much,” and one of the two spectrum-hogging channels could go.

At this point it would be helpful to point you to the submissions these and other witnesses have made to the Select Committee’s enquiry – but we can’t, because they’re inexplicably under embargo. If you've Silverlight installed, you can watch the second session here. ®